Follow up on previous posting on China being the leader,  from the chart you can see the retracement level. I think Shanghai Composite Index will test the 50% retracement level. The 200 moving average is also at around that level.

Respected trader and educator J. Welles Wilder developed “AverageTrueRange” (ATR) as a tool for a more precise and realistic calculation of market’s price activity and volatility.

The ATR is useful when calculating the directional movement of a market. Wilder defined the “TrueRange” of a market to be the greatest of the following periods:

• The distance from the session’s high to its low.
• The distance from the previous session’s close to the next session’s high.
• The distance from the previous session’s close to the next session’s low.

A good example of a situation where TrueRange would be significantly larger than the normal daily trading range would be when price gaps occur on bar charts.

“TrueRange” measures market volatility and is an integral part of indicators such as ADX (Average Directional Movement) technical indicator, or several others, to identify the directional movement of a market. The ATR is the basic unit of measurement for Wilder’s Volatility System.

AverageTrueRange is a moving average of the TrueRange values over a period of time. The periods are the number of bars in a bar chart. If the chart displays daily data, then the period denotes days; in weekly charts, the period will stand for weeks, and so on. Wilder used a period of 7 for a default setting. Other common periods used are 14 and 20.

The AverageTrueRange indicator identifies periods of high and low volatility in a market. High volatility describes a market with ongoing price fluctuation; low volatility is used to define a market with smaller price range activity. 

When a market becomes increasingly volatile the ATR tends to peak, rising in value. During periods of little volatility the ATR bottoms out, decreasing in value. A market will usually keep the direction of the initial price move, though this is certainly not a rule. Analysts, therefore, tend to use AverageTrueRange to measure market volatility and other technical indicators to help identify market direction.

Wilder has found that high ATR values often occur at market bottoms following a panic sell-off. LowAverageTrueRange values are often found during extended sideways periods, such as those found at tops and after consolidation periods.

Measuring market volatility can help in identifying buy and sell signals and, additionally, risk potential. Markets with high price fluctuation offer more short-term risk/reward potential, because prices rise and fall in a shorter timeframe.

Wilder has a book, “New Concepts in Technical Trading Systems,” where more information on TrueRange and the ATR indicator can be found

Looking at the Volume transaction, there are more selldown than buy up. If Lian Beng can withstand the sell down with more buy up volume. ie:  Lian Beng is digesting it gains. By day close , you should know whether got indigestion . So far TRIN is at 0.41 . It is  looking good below 1 .

General trend is up with 20 and 40 MA sloping up .

There is a short term pullback that is indicated by the CCI which goes to the oversold region.

Fibonacci numbers are a sequence of numbers in which each successive number is the sum of the two previous numbers:

     1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233, 377, 610, etc.

These numbers possess an intriguing number of interrelationships, such as the fact that any given number is approximately 1.618 times the preceding number and any given number is approximately 0.618 times the following number.

Fibonacci Projection lines are used to predict potential levels of resistance and support. A minimum of three horizontal lines are drawn showing the projection levels in the market after a consolidation or retracement.

To calculate the Fibonacci Projection levels, you must identify three specific points in a market move:

    A, the beginning of a move up or down, B and C.

    In an uptrend, B is the highest point after A and
C is the lowest point after B.

    In a downtrend, B is the lowest point after A, and
C the highest point after B.

The total market move between A and B is then calculated, and the levels of the lines are then set according to three different ratio figures, using C as a starting level.

STI have a over-extended run which I have been bullish since 20th July. For now , I think it is time to more cautious. Most of the time the market will NOT over-extend beyond 261% before a pull back. This is however , just my personal view.  

These are the returns for the last 3 signal using CSI trading system. 

The return are 49.2%, 33.1% , 22% . All the buy and sell signals are generate automatically using the CSI system which I took years to design and build.

You can click on chart to enlarge it . ( Jakarta Composite Index)

How CSI work on ALL index

You need 3 signal to go long

Green Ribbon (at the base)

Blue Candlestick

Buy arrow.

To take profit for long , just wait for color of candle to change from blue to red.

For Short , the signal is

Red Ribbon

Red Candlestick

Red Arrow

The signal to cover you short position is when the candlestick change color from blue to red.

This is main essense of the CSI trading system.

There are other rules like trailing stop loss and re-entry to further enhance the returns.

STI breaking the uptrend line , watch closely.